Tech Nation forced into asset fire sale after UK funding pulled

Tech Nation, the UK group once pitched as pivotal to efforts to create a British start-up scene to rival Silicon Valley, has been forced into a fire sale of its remaining assets after Rishi Sunak’s government ended its funding.

The group was formed by the government in 2014 to boost the UK’s tech industry through “growth programmes” for start-ups and the processing of visas for overseas staff. A third of the UK’s tech “unicorns” have since passed through its development programmes, including Deliveroo, Monzo and Revolut.

But last month the government withdrew a £12mn grant to the group, instead awarding the money to Barclays Bank, forcing Tech Nation to close.

That move came just months after Tech Nation considered, but ultimately rejected, lucrative deals with Middle Eastern governments, according to two people with knowledge of the offers and a company document seen by the Financial Times.

Without any outside funding, business groups and tech organisations have been invited to bid on its intellectual property and other assets ahead of a February 14 deadline. The sale includes brands like Future Fifty, a programme supporting late-stage tech start-ups,

According to people with knowledge of the process, Founders Forum, the networking group for entrepreneurs established by lastminute.com founder Brent Hoberman, is among more than 30 organisations to express an interest in bidding for some assets. Some groups, such as London Business School, considered bids but have decided against proceeding.

Tech Nation’s demise comes after its funding dwindled in recent years, chief executive Gerard Grech told the FT, and in spite of the government’s stated ambitions to build a “science superpower”.

“I’m sure [Barclays] will do their best work with the grant,” said Grech. “I just think whatever the government says, it must match its own rhetoric with policies and support mechanisms that really, truly help the ecosystem.”

Funding shortfalls led Tech Nation to explore other options to plug a £6mn funding gap before it announced its closure.

In the autumn of last year, it came close to signing a £2.63mn contract with the Saudi Arabian government to support future Saudi unicorns, and a further £2mn contract focused on support for research-intensive “deep tech” companies, according to a company document seen by the FT.

It also engaged with the Dubai government on a £500,000 proposal to support UK companies and venture capital firms to expand into the Middle East, according to the document. The Dubai and Saudi Arabian governments did not respond to requests for comment.

“We made that decision not to [proceed with the contracts] because we were focused on the UK tech ecosystem,” said Grech.

He added that efforts to secure alternative private sector funding have failed, while an offer to become a public body and pass into government ownership was rejected.

Tech Nation will continue to run a visa processing programme for tech employees on behalf of the UK’s Home Office until the end of March.

Tech groups, including lobby group Coadec, are in early talks with the Home Office about how to take the visa programme forward. The Home Office said applications would be “unaffected” while it explores “long-term changes” to the scheme.